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IHS Screen Digest Mobile Media Intelligence Jack Kent 2013 Mobile Games H2 2012: GungHo succeeds in Japan outside DeNA and GREE Contents Companies in this report Symbol Seasonal boost drives record Q4 Amazon AMZN Konami reports QoQ growth, Capcom QoQ decline Apple AAPL International sales boost Gamevil, domestic focus for Com2uS Capcom TSE:9697 EA Mobile: record year for EA, freemium transition takes hold Com2uS 078340:KOSDAQ Gameloft reports smartphone and international growth DeNA TSE:2432 Year-on-year growth, but quarterly decline for Glu Mobile Disney DIS Growth slows for GREE, DeNA grows Electronic Arts ERTS GungHo proves there is life outside DeNA and GREE in Japan Facebook FB Games' dominance of Google Play grows GREE TSE:3632 Europe games focus: resource management titles dominate Gamevil 063080:KOSDAQ Mobile games hardware outlook 2013 Gameloft GFT.PA New platforms and stores present 2013 opportunities Google GOOG Glu Mobile GLUU Konami KNM Microsoft MSFT Nokia NOK BlackBerry BBRY Zynga ZNGA www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only. Unauthorised distribution prohibited. Downloaded 04 Apr 2013. Seasonal boost drives record Q4 for EA and Gameloft, Glu sees quarterly decline Western mobile games publishers' revenues ($m) EA Mobile saw impressive growth in Q4 2012 - with Q4 revenues up 23% 100 year-on-year to reach $86m (compared with $70m in Q4 2011). Freemium titles such as EA's The Simpson's Tapped Out helped it see a strong end to the year, with other longstanding titles such as Need for Speed also 90 performing well. Annual revenues also saw strong growth with 2012 total mobile sales of $317m up 26% on 2011. 80 IHS expects EA to see continued growth in Q1 when the seasonal boost of new devices purchased during the holiday quarter will continue to help sales 70 (as shown in Q4). Titles using in-app purchases will also be increasingly important across EA's range of freemium and paid titles. 60 Gameloft also performed well in Q4, seeing a seasonal boost that IHS expects to continue through Q1 2013. Total Q4 revenues for Gameloft 50 reached $74.9m (up 18% year-on-year, with annual revenues of $267.4m (up 17% from $228.5m in 2011). 40 Smartphone and tablet titles once again helped drive Gameloft's performance, accounting for 56% of Q4 2012 sales (up from 41% in Q4 2011. 30 Glu Mobile recorded strong year-on-year growth in Q4 and throughout 2012, 20 but ended the year on a difficult note with monetisation worries delaying its Q4 slate of new titles, illustrating the fragility of its business in the increasingly competitive mobile games market. 10 Glu's Q4 revenues of $21m were up 38% year-on-year from Q4 2011, but slightly down on Q3 2012 as new games were delayed. Annually, Glu 0 reported 2012 revenues of $87.4m, up 32% from $66.2m in 2011 as it completed its transition to a fully smartphone and tablet focussed games company. EA Mobile $m Glu Mobile $m Gameloft $m www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only. Unauthorised distribution prohibited. Downloaded 04 Apr 2013. Konami reports QoQ growth, Capcom has strong YoY growth but QoQ decline Capcom and Konami mobile and social games revenues ($m) Konami returned to quarterly growth in Q3 and Q4 2012, after second quarter 140 decline because of new Japanese regulations on the "compu-gacha" in-app payment mechanism. Though year-on-year revenues are still significantly lower as it has yet to match its 2011 revenue peak. Konami reported Q4 social network (almost all mobile) games revenues of $106m, 120 up 5% on the $100.5m achieved in Q3 2012 (but down 15% year-on-year). Annual revenues grew slightly in 2012, with $433.6m revenues up 6% from $410.5m in 2011. 100 Top performing H2 2012 titles included: - Sengoku Collection - Crows X Worst - Professional Baseball Dream Nine - Metal Gear Solid Social Ops 80 Capcom saw a quarterly decline in Q4 2012 as new titles have failed to match the success of longstanding mobile games titles such as its original freemium Smurf's release. Capcom's total Q4 mobile content revenues of $32m were up an 60 impressive 74% year-on-year from $18.4m in Q4 2011, but 19% down on the $39.4m achieved in Q3 2012. Annually, Capcom reported $136.5m revenues, 93% up on the $70.8m achieved 40 in 2011. Capcom saw a stronger performance in its domestic Japanese mobile operations which accounted for around 60% of 2012 revenues compared with 40% in 2011. 20 It also made moves to strengthen its international operations, establishing a development studio in Thailand in H2 2012 as part of its mobile Beeline brand. 0 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 Capcom Konami www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only. Unauthorised distribution prohibited. Downloaded 04 Apr 2013. Korea: international sales boost Gamevil, domestic focus for Com2uS Gamevil and Com2uS mobile games revenues ($m) Com2uS reported a QoQ decline in Q4, but its revenues of $19.5m were still 98% up on the $19.5 achieved in Q4 2011. 25 Titles for its domestic Korean market were the key driver of growth, accounting for 68% of 20 Q4 2012 revenues (up from 51% in Q4 2011). 2012 annual revenues were $68.3m up 109% from its $32.7m 2011 total. 15 "Com2uS Hub " a social platform to encourage cross-promotion and tie users to titles across different platforms launched in H2 2012. A number of publishers are deploying this 10 strategy . 5 Gamevil saw a stronger performance from international titles, which accounted for 62% of its $20m Q4 2012 revenues (up from 20% in Q4 2011). Gamevil's Q4 total was up 39% 0 year-on-year. Annually, the Korean publisher reported $62.5m revenues, up 61% on 2011. 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 Key Gamevil titles included a version of Zenonia for Japan's mobile social platforms and Com2uS Gamevil the latest in its sports series Baseball Superstars 13. Gamevil: smartphone and feature phone revenues (%) Com2us: smartphone and feature phone revenues (%) 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 Domestic International Domestic International www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only. Unauthorised distribution prohibited. Downloaded 04 Apr 2013. EA Mobile: record year for EA, freemium transition takes hold EA Mobile: annual revenues ($m) EA Mobile's transition to more freemium titles and monetisation 350 continued at pace in H2 2012 and early 2013. 300 It's top performing end of 2012 US iPhone titles: The Simpsons Tapped Out, Need for Speed Most Wanted, FIFA 13, The Sims Free Play, 250 Monopoly Hotels, and Madden NFL 13 Social all offered in-app purchases. 200 EA announced in early 2013 that in-app purchases would be included in all its forthcoming mobile titles (both free to download and paid). 150 EA also launched the latest in its Real Racing series (from its Firemint 100 acquisition). One of the best performing premium mobile racing mobile 50 titles, EA's latest freemium iteration of Real Racing received a mixed response from fans of the earlier paid version because of heavy-handed 0 usage of in-app charges. 2008 2009 2010 2011 2012 EA also reported growth in mobile use of its Origin community platform - claiming 17m mobile users by the end of Q4 2012. EA: mobile vs. handheld share of revenues (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 Handheld Mobile www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only. Unauthorised distribution prohibited. Downloaded 04 Apr 2013. Gameloft reports smartphone and international growth Gameloft: record quarter - strong international performance Gameloft - smartphone and tablet revenues ($m) Leading French mobile games publisher Gameloft reported year-on-year and quarter-on-quarter growth. It achieved Q4 revenues of $74.9m, up 18% 80 on Q4 2011 and 17% on Q3 2012. The share of revenues from smartphone and tablet titles continued to grow throughout 2012, accounting for 56% of Q4 2012 revenues, compared with 70 41% in Q4 2011. Gameloft saw a strong performance from its European market - which grew 26% year-on-year in 2012 and accounted for the largest share of revenues 60 31%. While North American revenues grew at a slower pace (13% YoY), its combined Asia-Pacific and Latin America revenues grew at a strong 25% 50 YoY rate. One of Gameloft's best performing H2 titles was its freemium Ice Age Village. As with EA, Gameloft also has its own community platform - 40 Gameloft Live - which claimed 7m players in eary 2013, 30 20 20% 31% 10 22% 27% 0 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 Smartphone and tablet revenues Other revenues* Europe North America Asia Pacific Latin America * Mainly feature phone games www.screendigest.com | www.isuppli.com © 2012 Screen Digest For the use of Wayne Goldstein - Sony Pictures Entertainment ([email protected]) only.